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V3141-20 20 October 2020 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · estimación directa simplificada

Costs of planting poplars for future sale treated as inventory rather than investment assets

A farmer requested clarification on the tax treatment of planting poplars intended for sale in 14 years. The DGT ruled that this constitutes a forestry activity and that the planting costs must be treated as inventory.

The question raised

Question posed: Tax treatment of this operation.

The DGT's ruling

The planting of poplars for sale constitutes the commencement of a forestry economic activity independent of agricultural activity. The net yield of this forestry activity must be determined by the simplified direct estimation method. The cost of the planting must be treated as the value of work in progress and not as an investment asset.

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